The Centers for Medicare and Medicaid Services has proposed a new rule that would effectively put to rest a provision inserted into last year’s fiscal cliff bill by Senate Majority Leader Harry Reid (D., Nev.) to help a U.S. company.

The original provision threatened to slash payments to the Swedish maker of a radiosurgical device called the Gamma Knife, thereby helping its competitor, a U.S. company that makes Linac – short for linear accelerator — machines.

The Gamma Knife is made by Elekta AB of Stockholm. Linac is manufactured by Varian Medical Systems Inc., a large, California-based medical-device maker with long connections to Sen. Reid. The Gamma Knife was specifically designed to zap tumors deep in the brain with radiation. The Linac system treats a range of cancerous tumors throughout the body.

Under the rule proposed Monday, CMS would reimburse any facility performing the delicate brain tumor radiosurgery in a single treatment the same amount, whether they use Gamma Knife or Linac. In 2014, that will be $8,500.

But the proposed rule would continue to pay lower rates for multiple treatments – about $2,500 each. The Gamma Knife usually requires a single treatment for brain lesions; Linac sometimes requires three to five treatments.

Both companies said they approve of the CMS proposal. CMS declined to comment.

Varian said in a statement that, “CMS confirms that there is little clinical or operational difference between treatment devices used to perform stereotactic radiosurgery procedures, therefore treatments should be reimbursed equally.”

In its statement, Elekta said, “By addressing the reimbursement levels for all types of stereotactic radiosurgery, the proposed approach will likely help ensure that patients and their treating physicians have meaningful access to the most clinically appropriate treatments.”

Varian had urged Medicare to raise the reimbursement rate for Linac treatments to the same amount — more than $7,000 — paid to hospitals and doctors using the Gamma Knife. A reimbursement for each Linac treatment was about $2,300 for this year. CMS didn’t budge.

Higher reimbursement rates make the machines more attractive to doctors’ groups and hospitals that buy and operate them.

About a year ago, Varian turned its attention to Congress. It began beefing up its team of outside lobbyists, adding eight more and bringing the total to 18, according to Senate records. Varian lobbyists pushed key senators to insert the provision in the fiscal cliff bill, according to congressional staff and other lobbyists. Their strategy was to lower the amount going for the Gamma Knife.

The provision was added on the last day of 2012, and Mr. Reid was instrumental in its insertion, Senate aides said.

The immediate effect of the provision, which could have cut reimbursements for use of the Gamma Knife by 58%, was a nearly 6% drop in the Elekta’s share price. Company executives told the Journal at the time that they were “shocked.”

This week, Elekta is celebrating. As of Wednesday evening, its stock had risen on the Nordic exchange by about 8%.

Mr. Reid’s spokeswoman had no immediate comment.

Mr. Reid has a long relationship with Varian. About nine years ago, he secured federal funding for Varian to work with the Harry Reid Center for Environmental Studies at the University of Nevada, Las Vegas, according to Oliver Hemmers, the center’s director. After the contract ended, the federal government transferred the Varian equipment to UNLV, and Varian has donated more equipment valued at least $1 million, said Dr. Hemmers.

Varian and UNLV are now partnering on a multimillion-dollar Accelerator Center for research in the national-security, health and energy sectors that could create thousands of jobs in Nevada and has commercial potential for the company, Dr. Hemmers said.

Rebecca Emerick, executive director of the International RadioSurgery Association, said the Medicare proposal would allow oncologists continued access to the Gamma Knife, which she called an important tool for treating brain tumors.

There will be a 60-day comment period before the CMS decides whether to confirm the rule.

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